Japan telecommunications

Sony’s FY2016 net profit falls by 50%

May 2nd 2017 | Japan | Mobile | Sony

On April 28th Sony Corp posted a 50% fall in attributable net income to ¥73.3bn (US$653.7m) for the fiscal year 2017. The Japanese technology giant was hurt by impairment charges related to its pictures, semiconductors and components units, along with higher expenses owing to damages from the 2016 Kumamoto earthquake.

Sony's revenue fell by 6% to ¥7.6trn, owing to a stronger yen against the US dollar, for the year ended March 31st. The yen rose by as much as 12% in the year. Lower sales of the company's smartphones in Europe, the Middle East and Latin America brought down revenue of the mobile communications division by 33%.

The company's smartphone business in Japan has also come under pressure from the success of Apple Inc's iPhone models in the country. The Economist Intelligence Unit expects this pressure on local handset makers in Japan, including Sony, to continue in 2017-20, forcing them to either improve their handset operations or exit the market.

Sales at Sony's game & network services arm rose by 6%, owing to higher sales of its PlayStation 4 gaming software and hardware. The company expects higher sales at this division, coupled with strong demand at its pictures and semiconductors businesses, to push revenue for fiscal year 2018 up by 5% to ¥8trn.

The gaming products maker forecast attributable net income to more than triple to ¥255bn, owing to gains from the sale of an equity interest and insurance claims related to the earthquake.